US manufacturing

Is it really hard to understand that if UHC were implemented, the amount we already spend today for private health care would no longer be spent on private health care? As mentioned above, the US already dumps over 50% more into private health care than you claim we would with UHC. Everything I've read points to the cost of healthcare at most staying the same in the US, most likely decreasing, and definitely not rising. The difference is that instead of a chunk of wages (both the employee-paid part and the employer-paid part) going to private companies, it would go to the federal government via taxes. Your take-home pay at worst stays the same.

At worst, the additional taxes to fund healthcare lower GDP. But I've said that before.

I wonder, what *was* it about the German economy that caused them to go from 8% structural unemployment and low growth over the past decade to one of the strongest countries in Europe right now? What changed?

It was a Hyundai, of Korean manufacture. Maybe US made cars wouldn't have had this problem...

All brands are vulnerable to rust, and after seeing the horrendous damage it does in States such as Michigan, PA, and my native New Jersey I'm fine calling it a winter problem though coastal cars in warmer climes get their share of corrosion.

Basically this is down to Gerhard Schroeder's (then chancellor, Social Democrat) introduction of a lower class via reduced benefits which was called Agenda 2010 and is now largely known as Hartz 4. His intention was to get more people productive by lowering social security standards.

The results are very mixed indeed. While Germany is a powerhouse of production, we now have a distinct lower class with minimal wages that are subsidized by the state all over the country (yes, UHC still functions on a very high level).

Of course this entails social problems. Top this off with a multitude of other issues like the still very different economic situation of east germany, immigrant integration in the west, an ageing society...

So is this (state-willed) reducing of an average person's economic level a valid approach in order to further productivity at a societal level? This seems to be happening here.

Basically this is down to Gerhard Schroeder's (then chancellor, Social Democrat) introduction of a lower class via reduced benefits which was called Agenda 2010 and is now largely known as Hartz 4. His intention was to get more people productive by lowering social security standards.

The results are very mixed indeed. While Germany is a powerhouse of production, we now have a distinct lower class with minimal wages that are subsidized by the state all over the country (yes, UHC still functions on a very high level).

Of course this entails social problems. Top this off with a multitude of other issues like the still very different economic situation of east germany, immigrant integration in the west, an ageing society...

So is this (state-willed) reducing of an average person's economic level a valid approach in order to further productivity at a societal level? This seems to be happening here.

Wow. If I'm reading correctly, the .gov created a lower class in recent years?

You're asking if the gov is acting for the greater good. None of that "trickle down economy" is happening over here. Budgets are just getting tighter and the rich are getting richer. Gerhard Schroeder, then Chancellor at the time, was a perfect minion of industry and is now working for Russian Gazprom. Any Questions?

In reading about Hartz, it actually looks more cushiony than what we have here.

Since when is more cushiony bad? Also, the comparison just might be lacking.

To be honest, I don't think it is. It looks like a robust safety net provided by the .gov, even if it's a reduced social safety net, when compared to what we have here.

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The state compulsion to accept a job is an interesting touch.

In which way would you like to see this happening?

I wouldn't. I wouldn't not like it, either. I'm ambivalent. It’s interesting that such a compulsion exists, since Germany’s reforms are heralded by some here in the US as a shining example of free markets winning out, etc, etc, etc.

Hmm, guess I need to start reading a lot more about the German/EU thing and the growing gap between the rich and the poor there. I'm probably wrong in my assumptions then. This is what I love about being liberal, I can admit when I am wrong or make a mistake. Wished other political wings were of the same backbone.

It seems the country with the lowest debt is Sweden, at 36% GDP. But man, this is some incestuous debt I am seeing. I don't think I have seen such a mess of debt owed to other countries. UK owes Germany and Spain 300 billion each, but Greece, Italy, and Portugal owes the UK 50 billion. Italy owes France around 365 billion dollars. Greece is the only country that I see that doesn't have money owed to them, they having nothing but debt to other countries.

But anyways, I was going to point out that the countries with the strongest economies seem to be majorly industrial in nature. Especially exports. Germany, France, Sweden, etc. Where as the countries like Greece don't seem to have any real heavy industry. I wonder if there is a correlation with owing lots of debt and not having a strong industrial backbone. Just wondering if it's related to debt in the EU.

Maybe they got it right in Europe: why subsidize poorer or mismanaged countries/states that cost more than they take in?

I can't speak to the european countries, but for the US states, it's this: It's not as simple as dollars in and dollars out.

IMO, dollar values are a little skewed right now compared to the real value of work done. An individul investment banker's work is not worth 1000 times more than a teacher's, IMO, but he makes 1000 times more money.

Farm subsidies keep the dollar value of agricultural output lower. Therefore, sprawling rural farms suck in large amounts of tax dollars and produce little tax revenue. Are the taxes paid by the companies that own the big farms even counted as coming from the rural states where the crops or grown, or from the urban states where the corporate headquarters are located?

Maybe they got it right in Europe: why subsidize poorer or mismanaged countries/states that cost more than they take in?

I can't speak to the european countries, but for the US states, it's this: It's not as simple as dollars in and dollars out.

IMO, dollar values are a little skewed right now compared to the real value of work done. An individul investment banker's work is not worth 1000 times more than a teacher's, IMO, but he makes 1000 times more money.

Farm subsidies keep the dollar value of agricultural output lower. Therefore, sprawling rural farms suck in large amounts of tax dollars and produce little tax revenue. Are the taxes paid by the companies that own the big farms even counted as coming from the rural states where the crops or grown, or from the urban states where the corporate headquarters are located?

Pont, I was being partly facetious with that question . I believe we should subsidize states that are poorer of course. Some states just have more issues than others, either based on geography, lack of material resources (don't think there's much gold mining or oil drilling in Mississippi for instance), or completely devoid of industry or high tech. My main argument with that post is essentially the point of the source I took it from: if the Tea party and Ayn Rand types want to go full monty, then the states that they consider to be the most conservative, and to which the majority of their members reside in, those states would be the first ones to be put on the chopping block if we really wanted to go with their ideas. And the "blue" states which they deride so much are in fact the real "producers" when you get down to it, barring a few exceptions.

From what I see, the biggest farm states on that map, places like Kansas, Iowa and Nebraska, have the best dollar in/dollar out ratio compared to the southern states like Miss or S. Carolina. And when I look at the southern states that a lot of these people consider as true conservative, none of them stand out as really big farming states, not when you compare them to the three that I mentioned. South Carolina and Mississipi I doubt are on par with them as far as crops are concerned (I am just guessing, I always thought the southern states specialized in tobacco compared to corn in the midwest). And West Virginia isn't really what we would call a farming state . Maybe a coal mining state.

Simple, if you ask me. We need to forget about the times in which we were a manufacturing power. There is no going back. The genie is long free from the bottle, and no amount of rose-colored glasses will get it back.

Why? One word, Globalization. Companies are now free to move their manufacturing to wherever it is the most cost efficient. That cost efficiency is a cross-section of living standards and education. Our living standard here in the US is among the highest in the world. We are accustomed to, and find socially palatable, much more then most other countries. This means the cost of living here is much higher. If it costs more to live somewhere, then people need higher paying jobs to live there, and will spurn lower-paid jobs. That's why all the car manufacturers have their factories in the South, as opposed to, say Seattle. Boeing is only here in Seattle because they always have been, and I suspect within the decade they will leave too. It simply costs too much to hire workers here, even compared to other states within the US. When you compare the minimum wage here in Seattle ($8.55USD?) to, say, China, our struggles with manufacturing become quite clear.

What do we do? Forget about it. We CANNOT be a manufacturing powerhouse and still be prosperous and live the American way. Would I prefer to live in a 600sqft flat and ride a bicycle to my 16hr shift at the factory, or a 1500sqft house and drive my car to my cubicle? The answer is obvious. The tradeoffs to see "Made in America" on the products I cannot afford to buy, they're absolutely not worth it.

Instead of counting on a pipe dream or the destruction of what our powerful economy has given us, I propose we make fundamental shifts to line our economy and our society up with our stature in the world. If our workers need the most money to live, they should be worth the most. Instead of slashing education spending and trying to destroy the country to get back to what the world was like pre-globalization, we need a massive boost to education. Being "smart" isn't cool in America, but it IS required. Sorry, Bubba, your dad's factory shift is gone forever. Suck it up and hit the books, or be marginalized with the rest of society. Instead of having the (27th? 35th?) best education in the world, we need to be in the top 3.

We cannot command the wages our culture demands working on a factory floor. We are now a service economy, and it would behoove us to admit it before we lose that too.

We need to forget about the times in which we were a manufacturing power.

Nonsense. The US is still a manufacturing power. We're just incredibly good at it, so good that we need a fraction of the workers that we once did.

Some day--not yet--China will surpass us in output. That's no surprise--they have far more people than us and their labor costs are so low that they use human labor where we use robots. But frankly I don't think there's any other country that will kick us out of that #2 spot for a long time, and that ain't shabby.

The US will remain a manufacturing power for a long time, but it won't be making the same stuff that Chinese factories push out. And we won't be employing a significant fraction of our workforce that way.

In terms of what actually powers our economy (what puts money into Joe Sixpack's pocket so he can go buy that nice flatscreen for the Super Bowl), we're not at all a manufacturing base. A bunch of robots producing stuff is cool and all, but who buys that stuff? People with jobs. Since those jobs aren't in manufacturing... I maintain, it's pointless to manufacture stuff here. Robots do just as well in China.

The only people still throwing around US MANUFACTURING are "trickle down" specialists - the people who own said factories. They're not employing too many Joes though, so as far as our economy's concerned, they're actually negative gains. One "job creator" with a factory of robots invests all his earnings to make more money - not adding much to the economy. One Joe and six thousand of his buddies can buy a hell of a lot of beer and then consume it, spending their money without intending to get a monetary return. Consumption is what has powered our economy for decades, and one "job creator" is effortlessly outmatched by his (fiscal) weight in "little people". I know a guy who has a helipad at his house - he sold the helicopter and bought a Prius because he wanted to be eco-cool. That one-percenter (well, he's well off but probably not one-percent well off) consumes much less then many of my friends do. Not because he can't, but because he doesn't want to. In the economic balance, one self-conscious upper-class person vastly tips the scales compared to one self-conscious lower class.

Where I'm going with this probably belongs in the "tax rates and wealthy" thread, but I don't think we should place as much worship at the feet of the robot-factory owners as our government does. The economic arguments make no sense. Does Paris Hilton or Bill Gates actually spend an amount of their fortune equivalent to how much of that same amount of money is spent by the lower class? Say, John CEO pulls in 250 million dollars a year, and a group of 2,500 people making $100k a year. Who spends more? Who CONSUMES more? Obviously John's investments and stocks are not just idle money (even what's in his bank account is nominally "at work"), but is it even fair to say that an investment in a company, with the requisite demands and/or interest, is equivalent to someone buying that company's product?

Assuming an easily-wrought 100% spend rate, John's 2,500 poor friends spend $250million a year - with no interest returns or dividends or anything back. They are ADDING $250m to the economy (but removing their bank's opportunity to invest it, granted). Does John CEO really spend $250m a year? Hell no! Does he invest a remarkable amount of money? Absolutely. Does that investment provide the same benefit as the raw consumption? I think not.

Tangent result? I see the lower classes as being essential to our economic future. Therefore, the rich getting richer literally harms the economy. They just can't consume at the same rate as the lower classes - and investment means nothing if the company has no demand to grow on. If the rich REALLY want to get richer, they'll ensure there's a thriving middle class to buy the products of the companies the rich own. How do we do that? Refocusing away from a field that doesn't employ our citizens. I reiterate, we are a service economy.

We cannot command the wages our culture demands working on a factory floor.

Or elsewhere. Time to reset our want lists.

US prosperity is the result of geography and the Second World War, which was the best thing ever to happen to the US economy. Shipping is now cheap, and our competitors recovered long ago. It was nice while it lasted.

Our culture doesn't have to "demand" high wages. Those wishing to sell goods and services to a given market must price accordingly.

We cannot command the wages our culture demands working on a factory floor.

Or elsewhere. Time to reset our want lists.

US prosperity is the result of geography and the Second World War, which was the best thing ever to happen to the US economy. Shipping is now cheap, and our competitors recovered long ago. It was nice while it lasted.

Our culture doesn't have to "demand" high wages. Those wishing to sell goods and services to a given market must price accordingly.

Damn right it does. What kind of culture willingly gives up its prosperity and standard of living? The fact is, as noted by the previous poster, the American consumer is an enormously important entity in the world economy and workers making $1 per day can't afford ipads, or even the mountains of junk available on the average shelf at Walmart. The bankers and corporations that are willing to sell out future prosperity and stability for a fat quarterly bonus are wantonly destructive and certainly have the upper hand right now but consumers still have considerable weight. They are also supposed to have weight as voters and citizens but that is proving to be illusory as the US govt is clearly more beholden to wealthy interests (contributors) than it is to citizens.

Major shifts could occur if 'consumers' started spending their money strategically, in their communities, with local businesses, etc. This would create jobs, and jobs that pay a decent wage. Of course, the major trade-off is that people would need to buy less stuff. But the end-game in the race-to-the-bottom around wages is going to lead to less stuff anyway. So they can be prosperous and own less stuff or destitite and own less stuff. Seems like a bit of a no-brainer. Of course, I've met my share of 'no brainer' people so...

Anyway, let me close my point by flipping your closing sentence around on you:

Our culture doesn't have to "demand" the lowest prices. Those wishing to sell goods and services to a given market must provide a net gain to the communities they do business in.

The fact is, as noted by the previous poster, the American consumer is an enormously important entity in the world economy and workers making $1 per day can't afford ipads, or even the mountains of junk available on the average shelf at Walmart. The bankers and corporations that are willing to sell out future prosperity and stability for a fat quarterly bonus are wantonly destructive and certainly have the upper hand right now but consumers still have considerable weight.

The AmericanWesternized consumer is the grass in the classic "tragedy of the commons" story. It's in the 0.1%-ers collective interest that we keep enough wealth to buy stuff, but in their individual interests to extract as much of that wealth as they can as fast as they can.

The commons grass had considerable weight too, before it was converted into steaks for the tables of the well-to-do.

What kind of culture willingly gives up its prosperity and standard of living?

If it wants more wealth, it must compete. Prosperity is obtained by successful competition. Holding out for wages no one will pay you is a strategy you are welcome to try. Unless you do what others don't want to do (or think they won't), many folks will compete for your spot and the market will bear lower wages. (In your shoes, staying Active Duty until retirement is a good deal since Americans of both Parties love war and no matter who is in power they'll at least pretend to love you if you wage it for them.)

Meanwhile, yet another manufacturing plant opens in South Carolina. US wages can provide for a reasonably comfortable standard of living and allow competitive manufacturing.

What kind of culture willingly gives up its prosperity and standard of living?

If it wants more wealth, it must compete.

I'm sure that looks good on a bumper-sticker but it's so simplistic a notion to be utterly worthless in a discussion about complex economic issues.

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Prosperity is obtained by successful competition.

Except where it isn't. Plenty of companies and individuals are beneficiaries of preferential treatment in regards to government contracts (especially in the banking and military contractor areas), allowed to maintain de-facto monopolies, and recipients of direct and indirect subsidies (banking again, and agriculture). More and more government policies and regulations are stacked in favor of large corporations and banking entities and against small businesses and labor.

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Holding out for wages no one will pay you is a strategy you are welcome to try. Unless you do what others don't want to do (or think they won't), many folks will compete for your spot and the market will bear lower wages.

Where did I say anything about 'holding out for more wages'. I suggested that trying to compete with Chinese workers earning a dollar a day is nothing more than a race to the bottom. I believe at this point, with governments captured by corporate and banking interests that don't give a fuck about maintaining a balanced society (even if that balance may be essential for their future wealth) if they can put another dollar in their pocket today, that the main -- or only -- way that the Western middle classes can excert their influence is as 'consumers'. Specifically I said if consumers started spending their money strategically, in their communities, with local businesses, etc. This would create jobs, and jobs that pay a decent wage.'

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As more discerning(In your shoes, staying Active Duty until retirement is a good deal since Americans of both Parties love war and no matter who is in power they'll at least pretend to love you if you wage it for them.)

Way to completely destroy YOUR OWN argument. What the fuck does military duty have to do with COMPETITION? It's just another government teet, if not the mother of all government teets. I guess if we want to pretend that massive govt debt is sustainable no matter how large it gets as long as you control the printing press then I guess we'll have to agree to disagree. But please don't pretend that this state/bank controlled economy has much or anything to do with 'competition'.

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Meanwhile, yet another manufacturing plant opens in South Carolina. US wages can provide for a reasonably comfortable standard of living and allow competitive manufacturing.

BFD. Factories open. Factories close. The macro numbers are what count and those numbers don't look good. The American/Western manufacturing base is shrinking as is 'labor' share of wealth (labor in this case is ALL salaries: blue/white collar, etc from taco bell employees to oil company CEO but not including investments, capital gains etc) which had remained remarkably constant from 1940s to 2002. That's your disappearing middle class.

The fact is, as noted by the previous poster, the American consumer is an enormously important entity in the world economy and workers making $1 per day can't afford ipads, or even the mountains of junk available on the average shelf at Walmart. The bankers and corporations that are willing to sell out future prosperity and stability for a fat quarterly bonus are wantonly destructive and certainly have the upper hand right now but consumers still have considerable weight.

The AmericanWesternized consumer is the grass in the classic "tragedy of the commons" story. It's in the 0.1%-ers collective interest that we keep enough wealth to buy stuff, but in their individual interests to extract as much of that wealth as they can as fast as they can.

The commons grass had considerable weight too, before it was converted into steaks for the tables of the well-to-do.

It's a nice analogy, and probably apt, but today's average middle class worker has numerous advantages over their feudal counterparts most notably literacy/education, access to information, and the ability to communicate and organize themselves. The other side have many new tools at their disposal as well, notably propaganda and access to considerable brute force. The tragedy of the commons could play out again, but it's not a foregone conclusion at this point.

BFD. Factories open. Factories close. The macro numbers are what count and those numbers don't look good. The American/Western manufacturing base is shrinking as is 'labor' share of wealth (labor in this case is ALL salaries: blue/white collar, etc from taco bell employees to oil company CEO but not including investments, capital gains etc) which had remained remarkably constant from 1940s to 2002. That's your disappearing middle class.

If anything domestic manufacturing has gone through a recovery in the last couple of years, though it's not adding nearly enough jobs to make up for everything else going on.

As more discerning(In your shoes, staying Active Duty until retirement is a good deal since Americans of both Parties love war and no matter who is in power they'll at least pretend to love you if you wage it for them.)

Way to completely destroy YOUR OWN argument. What the fuck does military duty have to do with COMPETITION? It's just another government teet, if not the mother of all government teets. I guess if we want to pretend that massive govt debt is sustainable no matter how large it gets as long as you control the printing press then I guess we'll have to agree to disagree. But please don't pretend that this state/bank controlled economy has much or anything to do with 'competition'.

As an aside, this part was directed at me, being active duty military. It wasn't a general-consumption advice.

If anything domestic manufacturing has gone through a recovery in the last couple of years, though it's not adding nearly enough jobs to make up for everything else going on.

I can foresee Manufacturing in America continuing to grow, especially if China begins to experience some internal strife, resource constraints or pushback from its trading parter(s).

The one thing that I am sure of though, is that there will never be more people working in in the Manufacturing sector. There just aren't any likely events that would cause that to happen.

The list of tasks that can not be automated in an economically profitable manner is rapidly shrinking. Almost all of the "Blue Collar" jobs associated with Manufacturing have already fallen below that line and what little remains seems to be shrinking rapidly.

The only way for the US to maintain its position as the Number #1 or Number #2 manufacturer of goods on the planet is to continue to embrace automation. Trying to put people into jobs that robots have automated isn't viable in the long term. It might feel good, but ultimately it makes us less productive and less competitive.

It would be a mistake of the first order to predicate any sort of recovery in the general economy on increased employment in the Manufacturing sector. Its just never, ever going to materialize.

In the global war economy, Automation is one of the best tools available for fighting cheap unskilled labor in foreign markets.

You can't eat "living in the #1 manufacturing nation", you can't wear it, you can't drive it, you can't live in it... what's the purpose?

You can wear the clothes it makes and drive the cars it produces, and live in the houses that are constructed by it.

Remember that you've been living in the #1 manufacturer for all of your life (unless you lived somewhere else at some point, I don't know). You didn't work in a factory but it still had a major effect on your lifestyle.